Consumer decision-making process models

Consumer decision-making process is highly related to consumer behaviour studies and has become an important research topic over the decades. To analyse the consumer decision-making process in more detail from the point of view of theory, it is important to get acquainted with the theoretical models which have been developed to understand how consumers make purchase related decisions.

Furthermore, the theoretical models offer useful and simple visualisations which help in understanding the phenomenon of consumer decision-making better.

(Erasmus et al., 2001.) From the point of view of marketing, it is essential to study how consumers are behaving when making purchase related decisions in order to understand them better and to be able to utilize this knowledge in marketing activities (Stankevich et al., 2017). Relevant previous research exists already from decades ago and during 1960s’ and 1970s’ many of the theoretical models, con-sidered as the “grand models”, depicting consumer decision-making were formed (Erasmus et al., 2001). These grand models are presenting frameworks which demonstrate the relationships between important variables, which were found to have an effect on the purchase related decision-making of consumers (Kokkinaki & Gemtou, 2015).

To mention a few of the significant models considered as the “grand mod-els”, Nicosia model (1966) and Howard-Steth model (1969) are good examples to consider (Teo & Yeong, 2003). The Nicosia model presents a framework where the highlight is on the relationship between the consumer and the company dur-ing the purchasdur-ing process. The Nicosia model is mostly applicable only for pur-chases where the consumer does not hold any prior information regarding the product in question. The Howard-Steth model is more focused on recurrent pur-chases and emphasizes the purchase related learning processes of consumers in the long run. The Howard-Steth model presents a framework consisting of five different elements, which are inputs, perceptual constructs, learning constructs, outputs and exogenous factors. (Kokkinaki & Gemtou, 2015.)

One of the most well-known models of consumer decision-making process is the Engel Kollat Blackwell model of consumer behaviour (EKB model), which was introduced in 1968. As introduced in the first version of EKB model, tradi-tionally the consumer decision-making process is divided into five different stages that each consumer goes through when planning and executing a purchase.

The stages include problem recognition, information search, evaluation of alter-natives, the actual purchase decision and post purchase evaluation (Figure 4).

The model indicates, that besides the actual purchase the whole purchasing pro-cess is much more complex and takes place long before and after the purchase.

(Engel et al., 1968; Erasmus et al., 2001.) This traditional five step approach pre-sented in the EKB model has been observed to suit the consumer decision-mak-ing process especially regarddecision-mak-ing purchases of high-involvement products, which often require more time especially before the purchase to get familiar with. This is because high-involvement products often refer to products with complexity and therefore they need to be considered more carefully than many everyday products. (Wolny & Charoensuksai, 2014.)

Figure 4. The traditional consumer decision-making process model (Engel et al., 1968)

Some criticism towards these traditional models has been presented after their creation. For instance, there has been criticism regarding how the traditional models are assuming that consumers are always behaving rationally when mak-ing purchases. However, consumers are also able to make purchase related deci-sions subconsciously or based on emotions. In addition, the overly general nature of the information provided by these traditional models has received some criti-cism. (Erasmus et al., 2001.)

Therefore, when time passed, many of the “grand models”, for instance the EKB model, faced the need to stay modern and therefore it was modified and specified in the following decades in order to stay up-to-date and to provide even better understanding of the phenomenon in the ever-changing market environ-ment. For instance, in 1982 the EKB model was revised by Engel and Blackwell and the focus of that model shifted more towards the high involvement versus low involvement purchases in terms of the whole purchase decision-making pro-cess. (Erasmus et al., 2001.) In addition, the EBM model is another revised version created by Engel, Blackwell and Miniard in 1995. In the EBM model the objective was to build a theoretical simulation of purchase related consumer decision-mak-ing process. The benefit of the EBM model is that it is suitable for multiple differ-ent situations and therefore it offers widely usable information. In addition, con-trary to other models, the EBM model demonstrates how consumers process in-formation and also includes both positive and negative purchase experiences.

(Teo & Yeong, 2003.)

Problem/ Need Recognition

Information Search

Evaluation of Alternatives

Purchase Decision

Post Purchase Evaluation

Furthermore, even though the traditional models often present the five stages of consumer decision making, not necessarily all those five stages are com-pleted in every purchase process (Gupta et al., 2004). The purchasing process of different consumers can vary notably. The process does not necessarily follow all the steps in a typical order and therefore discrepancies in the typical linear model may appear. In some cases, the purchase process may be more straightforward and therefore skip some of the stages and in some cases iteration of stages can occur. (Karimi et al., 2015.) This often depends on how complex the product or service in question is. For example, with already very familiar products, the in-formation search stage may be left out or when there is already a favourite brand the consumer is preferring, evaluation of alternatives may not be necessary.

(Gupta et al., 2004.) Besides the traditional five stage framework of consumer purchase decision-making process, there are also other ways how researchers have analysed and explained the phenomenon. For instance, some research pre-sents the consumer purchase decision-making process as a model with three stages, consisting of pre-purchase, purchase, and post-purchase stages. (Fram-bach et al., 2007.)

Court et al. (2009) utilize the term decision-making journey when examin-ing the phenomenon of consumer decision-makexamin-ing. Accordexamin-ing to this research, the decision-making process is visualised as a circle consisting of four stages. The first stage is initial consideration, where consumers contemplate the purchase by getting familiar with the initial set of potential products. This is followed by ac-tive evaluation, where the consumers evaluate the potential brands and eliminate the ones which are found unsuitable. In this stage possibly the search is also con-tinued to find other new alternatives. After that follows the closure stage, where the actual purchasing is taking place. The final stage is post-purchase, which af-fects the opinions of consumers for the future purchases and this makes the con-sumer decision-making journey ongoing. (Court et al., 2009.) Whereas, Butler and Peppard (1998) present a theory, where the goal is to outline the main elements of consumer purchase decision-making by combining new information with the traditional theories. The Figure 5 below displays how in that theory, each pur-chasing process category is situated based on the type of problem-solving behav-iour performed by consumer. The problem-solving behavbehav-iour changes between routine, limited and extensive behaviour based on the type of purchase in ques-tion. Routine purchases include regular everyday purchases with low risk which therefore do not require much consideration whereas the extensive purchases are riskier; most likely the product in question is more expensive and rare purchase, such as a new car, which requires more consideration. The limited problem-solv-ing behaviour is situated in between, and it describes the purchasproblem-solv-ing situations regarding products which do not have that excessive selection, and which do not require that high involvement from the consumer and therefore the decision making-process is relatively straight forward. (Butler & Peppard, 1998.)

Figure 5. Characteristics of the purchasing decision in consumer purchasing (But-ler & Peppard, 1998)